Wall Street broker Bernstein has warned that a failure to pass the Digital Asset Market Clarity Act before the Senate's summer recess could spark another selloff across Bitcoin $BTC and the b
Wall Street broker Bernstein has warned that a failure to pass the Digital Asset Market Clarity Act before the Senate's summer recess could spark another selloff across Bitcoin $BTC and the broader crypto market, as the window for 2026 passage narrows sharply.
Bernstein analysts led by Gautam Chhugani wrote that the CLARITY Act is "the most consequential crypto market structure bill in U.S. history," but said chances of it passing in 2026 appear to be dwindling.Bernstein estimates those chances have fallen to roughly 30%, based on odds from Galaxy Research.
The broker said prospects of the legislation passing have deteriorated as the Senate runs out of time before recess, despite the resolution of some contentious issues including stablecoin yield rules.A revised ethics compromise was submitted to the White House by bipartisan senators Thom Tillis and Ruben Gallego ahead of the Senate's August 7 recess deadline, with ethics restrictions for senior government officials tied to crypto remaining one of the thorniest sticking points, complicated further by President Donald Trump's own crypto business interests.
Senate Majority Leader John Thune has predicted that the CLARITY Act will not find runway to pass before the Senate starts its long summer break, a significant blow to the possibilities of 2026 passage.It is also doubtful the Act will become law in 2026 given the upcoming midterm elections that are likely to disrupt Congress this fall.
Bernstein said failure to pass the CLARITY Act this year would likely trigger another selloff in crypto markets, but argued that U.S. regulators would respond by accelerating rulemaking to provide greater regulatory certainty for the industry.The broker expects the SEC and CFTC to accelerate rulemaking under Project Crypto, even without legislation. Analysts still see crypto recovering toward late Q3 and early Q4.
JPMorgan also warned last week that fading prospects for the CLARITY Act to pass the U.S. Senate this year are a setback for crypto, saying further delays could undermine one of the industry's biggest regulatory catalysts.
The CLARITY Act would govern how much of the crypto market is subject to securities laws or CFTC oversight, outlining what obligations apply to exchanges, market makers, and other crypto firms.If the bill fails to move forward before lawmakers leave town, there is little room in the calendar for another push before the midterms, which could shift control of Congress and send the legislation back to the starting line.
Sources:CoinDesk: Bernstein sees another leg lower for crypto markets if Clarity Act stallsCrypto Briefing: Senate has 5 days to pass the Crypto Clarity Act before summer recessCoinDesk: Clarity Act expected to miss its window before Congress summer break
